In this process of integration into the world economy Egypt can not simply respond passively to increased competitive pressures, but has to define and implement winning strategies for its industry. Achievements of Egyptian industry to date, though considerable, are not enough. Egypt offers advantages in terms of the skills of its human resource, low labor cost, availability of natural resources and energy, geographic location, and political and social stability.
According to the Ministry of Planning, 2004/2005 GDP has increased from a growth rate of 4.1 percent in 2003-2004 to more than 5 percent in 2005. Exports increased by a rate of 32 percent and investment reached 17.7 percent of GDP . It is also worth mentioning that Egypt's international trade percentage to GDP reached 57.9 percent from 45.8 percent in the previous year, where the share of exports percent in GDP increased from 21.6 percent to 28.1 percent .
The country is heavily dependent on imports and the ambitious development program is, in part, aimed at balancing the country‘s trade deficit – alongside improving its export performance. The Egyptian government has launched a 20-year plan involving a three-phase US$10bn investment program to develop the country‘s petrochemical sector, helping to maximize the potentiality of recently discovered gas reserves. The plan should substantially increase the petrochemical industry’s output over the coming years, with ethylene capacity forecast to double by 2008.
The plastics industry in Egypt is growing and modernizing steadily. In 2004, Egypt consumed approximately 1.2 million tons of plastic materials and resins worth U$1.65 billion, and this demand is expected to grow at 10% annually for the next 5 years at least. Scope of production includes raw materials, home appliances, plastic bags, packages, pipes, fiberglass products, bottles, automotive accessories, and others.
Egypt’s plastics market is supplied 65% from imports and 35% from domestic sources. The main suppliers are Korea, India, Russia, and the Gulf States.
|Electric parts, hoses, wire cables& pipes
|Woven Bags & Ropes
|Furniture & House wear
|Plastic and Acrylic Sheets
|Machinery for dyes Manufacturing
|Sanitary plastic ware, fittings, Poultry water tray
|Clothing & Footwear
Polyethylene, polyvinyl chloride suspension, PET, and thermoset plastics are the most common locally manufactured products. A private company now produces polypropylene, but most propylene continues to be imported. The excellent quality of EU-made products, explain their popularity in Egypt.
The Far East and Russia have penetrated the market with acceptable quality and a roughly 10% price discount in comparison with their competitors.
In spite of local production of the above-mentioned raw material, the market is not yet saturated. As the Government of Egypt is focusing on exporting to collect foreign currency, 75% of local production is meant for exports, while only the remaining 25% is used locally. It is expected that in the coming five years, Egypt will produce styrene/polystyrene, acrylic fibers, and propylene; increase its production of polypropylene, and expand its existing PVC output and produce polyester and polyethylene terephthalate.
Facts and Figures
Total large and medium plastic production facilities = 1276 Factories
Total Market Volume = USD 4.03 Billions
Total Investments = USD 3.62 Billions
Total Employment = 415,000 Employees
Production of specialty and fine chemicals is virtually non-existent and demand is currently served by imports. This means the petrochemical sector lacks a crucial potential domestic market for some of its Products but, with almost 70mn people ,the market is of growing interest to multinational players and a number of feasibility studies are being undertaken. Sweden's fine chemicals producer Hebi has already invested and its first plant was commissioned in 2003.
National Plan for Petrochemical Industry
According to the Egyptian ministry of petroleum and energy, 14 Petrochemical Industrial Complexes with estimated investments of around US$ 10 Billions are to be established by 2020.
Phase I (2002 – 2008)
Estimated investments of US$ 3.4 Billion in the following sectors:
- Acrylic Fiber
Phase II (2009 – 2015)
Estimated investments of US$ 3 Billion in the following sectors:
- Aromatic complex
- SB Latex
- 2nd Olefins complex
- Methanol II
Phase III (2016 –2022)
Estimated investments of US$ 3.6 Billion in the following sectors:
- Vinyl’s complex
- Propylene / Polypropylene
- 3rd Olefins complex
- Styrenic complex
- SB Latex